OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 10 to 14 Lower |
| Soybean Futures: | 18 to 25 Lower |
| Soybean Meal Futures: | $3 to $5 Lower |
| Wheat Futures: | 12 to 18 Lower |
MILK:
Milk futures were under pressure Wednesday with overnight trade pointing to lower prices again Thursday. Cheese prices seem to be in a free fall with buyers showing little interest in purchasing. One would think lower prices would stimulate the interest of buyers for upcoming demand later in the year. However, milk production remains strong, keeping bottlers and manufacturers well supplied. This leaves a readily available supply for the market. Farms are not slowing down milk production, as will be seen on the June Milk Production report Thursday. I estimate milk production to be up 3.8% from a year ago with cow numbers up 2,000 head from May. The June Livestock Slaughter report will also be released which should continue to show reduced dairy cattle slaughter numbers.
CHEESE:
There seems to be no support under cheese prices. After the period of strength about three weeks ago, the weakness has increased in intensity. The last time barrel price was this low was when price began the large rally in August last year. A similar rally will not happen this year due to very different market fundamentals.
BUTTER:
Price has been able to hold its own much better than cheese. The price gap between butter and cheese continues to widen after spending some time close together. The supply of butter is more in line with demand. The June Cold Storage report will be released Thursday with inventory expected to show an increase; but the increase might be lighter than usual.
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